Why Your Grant Always Depends on Your Equity Capital?
Why Your Grant Always Depends on Your Equity Capital?
You’re applying for public funding from your Regional Council, Bpifrance, France 2030, or an EU program? Good news: public grants are powerful tools to finance innovation, reduce your risk, and accelerate growth.
Bpifrance, France 2030, or an EU program? Good news: public grants are powerful tools to finance innovation, reduce your risk, and accelerate growth.
1. An Unbreakable European Rule
Whether grants come from the European Commission, the French government, or local authorities, they all follow the same principle: Proportionality and co-financing.
- In practice: Funders typically require at least 30% private co-financing.
- Depending on your size, sector, and the program, public funding is capped between 20% and 70% of total project costs.
Translation: the stronger your equity base, the higher the grant you can unlock.
2. Equity Capital Signals Financial Credibility
Your equity level is one of the first things funders scrutinize. Why?
- Because it signals:
- A financial cushion in case of delays or losses
- Your resilience and autonomy
- Your ability to execute without relying solely on public money
- Reminder: your equity capital includes:
- Share capital (from founders, angels, or VC funds)
- Reserves (retained earnings)
- Undistributed profits
- Bottom line: more equity = better chances of securing high-level public funding.
3. How to Increase Equity Before Applying for a Grant
Not enough equity to qualify? Don’t panic, here are smart ways to boost it:
- Zero-interest loans Networks like Réseau Entreprendre or Initiative France offer “honor loans” that count directly as equity.
- Business Angels or VC fundingEven a small equity round enhances your share capital and credibility.
- Reinvesting profitsIf your startup is already generating revenue, reinvesting it into your equity base shows commitment and strategic maturity.
- Stacked public programsSome grants allow you to combine equity and public money for stronger leverage — like coupling a regional program with a France 2030 grant.
4. Grants + Fundraising = Strategic Combo
Too many founders think they must choose between grants and equity rounds. That’s wrong. They work better together.
- Concrete example:
- You raise €200k from angel investors
- You present it as private co-financing
- You apply for a €300k grant from your Region or France 2030
- Total: €500k runway to execute your roadmap with reduced dilution.
Useful link: France 2030 – aides à l’innovation
5. How to Prepare a Grant-Winning Application
- Strong equity is key but not enough on its own. You also need a bulletproof file, including:
- A clear and realistic business plan
- A go-to-market strategy with timelines
- Solid KPIs (traction, revenue, user base)
- A detailed tech roadmap with key milestones
- Annexes and cost justifications for projected expenses
- Expect grant disbursement delays of 2–6 months after submission — plan for this in your cashflow projections.
Flag Helps You Maximize Your Equity AND Your Grants
At Flag, we know the formula for public funding success: solid equity + strategic roadmap + optimized grant application
- We help you:
- Build a full financial strategy combining equity and public funding
- Secure higher leverage through the right mix of tools
- Secure higher leverage through the right mix of tools
Explore our services.
Conclusion: More Equity = More Grants
In short: Your grant will always depend on your equity base. It’s a European rule and a universal requirement across Bpifrance, France 2030, Regions, and EU programs.
So if you want to maximize your chances, start by building up your capital and credibility. Grants will amplify your effort but never replace it.
Not sure where to start? Reach out, we’ll walk you through it.
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